RGS proteins (Regulators of G protein Signaling) are a recently discovered family of proteins that can turn-off G protein signaling by accelerating GTP hydrolysis and antagonizing G protein effectors. Their location, specificity and regulation within the cell are poorly understood. Presumably, they must be at the membrane to interact with G proteins and effectors. We found that the membrane affinity of RGS proteins could be increased by palmitoylation, the reversible modification with palmitate. RGS-GAIP, RGS 3, 4, 5, 10 and 16 underwent palmitoylation whereas two similar proteins RGS8 and RGS9 did not, suggesting that palmitoylation may differentiate the location or membrane binding of this family of proteins. Palmitoylation is critical for the function of RGS16. Mutation of cysteine residues at residues 2 and 12 in RGS16 blocks its palmitoylation and impairs its ability to inhibit both Gi and Gq-linked signaling pathways. The absence of palmitoylation did not alter the in vitro GTPase activity of RGS16 suggesting palmitoylation localizes RGS proteins to G proteins signaling components in the membrane. We investigated whether palmitoylation could target RGS proteins to membrane microdomains characterized by their resistance to detergents and enrichment in sphingolipids and cholesterol. RGS-GAIP and RGS16, but not the nonpalmitoylated RGS16 mutant, were found in these microdomains, called rafts. We are studying whether other RGS proteins are also localized in rafts and the functional consequences of this localization.